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Study: Origin Labeling Maybe Not So Important After All

Researchers from Kansas State and Oklahoma State Universities recently released the results of a new study to determine consumer reaction and possible meat demand changes from the 2009 mandatory country of origin labeling ruling in the U.S., finding the ruling has not impacted either factor.

At the culmination of lengthy consideration, WTO in 2009 ruled the United States could implement MCOOL for fresh meat, immediately sparking controversy in the livestock and packing industry. Supporters of the measure said it would improve consumer choice, while opponents said it would be a source of unnecessary cost without benefit.

Another piece of the puzzle added to country of origin meat labeling discussion

Now, researchers Glynn Tonsor, Ted Schroeder and Mykel Taylor, Kansas State University, and Jayson Lusk, Oklahoma State University, say a new study shows that many consumers are unaware of the mandated COOL labeling, suggesting a limited consumer benefit, and are also not responding through increased demand or preference for domestic or imported meats.

Tonsor and his colleagues constructed the study through a multi-phase approach, including in-store grocery shopper canvasing, a national survey and grocery purchase data.

"Nationally, roughly two-thirds of the public says they do not know when asked if we have MCOOL. About 23% to 24% are aware that we have MCOOL," Tonsor says. "So the short summary of that would be one of our key findings – the public is not aware that we have MCOOL which stacks the deck against the likelihood that we have a demand increase."

The study did not find a demand impact either, citing that demand wasn't different before or after the ruling. Tonsor says this finding has an important economic implication.

"We know there's a cost of initiating the policy. Those have been debated," Tonsor says. "The industry had to adjust to come into compliance. We're finding basically that there are no offsetting demand increases, so that suggests a net economic loss."

Additionally, Tonsor says that because consumers aren't responding to different labeling, it infers an attitude of indifference toward meat produced, for example, in the U.S. versus North America.

"It's one thing to say, 'The public wants origin information.' It's another thing to say 'Do they care about the specifics of the origin?' That may sound like semantics, but that's an important difference because you actually could be MCOOL-compliant with different origin labels and the cost of providing those labels or changing the industry structure in the background could be quite different. So if the demand is the same but the costs are different, that's economically important as well."

That very issue came to the forefront this June when the WTO entertained a complaint from Canada and Mexico that the U.S. labeling laws discriminated against their beef. Though the U.S. COOL was found non-compliant to rules on technical barriers to trade, no timeline was given for the U.S. to enter compliance.

However, the timeline was revealed Tuesday when the WTO said May 23, 2013, was the deadline for the U.S. to come into compliance. The ruling means that packers many no longer be required to differentiate U.S. meat from Canadian or Mexican meat, however, labeling may be allowed as long as it not a technical barrier to trade.